Cash or credit?
There are many benefits to adopting a cash-based system, as Danny Kofke, an educator and writer, explains in his book.
The Prosperous Educator: Insights for Thriving on a School Teacher’s Income
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Kofke points out, “A lot of us feel emotionally connected to those fresh, green banknotes. We remember getting up so early and working tirelessly to get our hands on them,” he explains. This strong bond makes it significantly more challenging to let go of physical money when compared to simply tapping a credit card. However, because of the coronavirus outbreak and concerns about germ transmission, many people are handling cash far less frequently these days. With contactless payments like cards or chips, only you come into contact with your payment method during transactions.
Though there are some
purchases you should consistently make using a credit card,
When using a credit or debit card, you often fail to keep track of your spending by the end of the day, explains Saranya Ramanathan, who writes about personal finances for onefinewallet.com. “This differs significantly from handling cash,” she notes. With physical money, you witness each dollar transitioning directly into smaller denominations like cents before your very eyes, which can prevent frivolous purchases. Utilizing cash essentially acts as a psychological tactic to curb overspending.” While an increasing number of people prefer digital transactions today, certain situations warrant withdrawing actual currency from ATMs instead. Make sure not to overlook this advice.
Psychological tactics to help you save money when shopping
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Small purchases
Tiny buys from neighborhood stores and enterprises are perfect opportunities to use cash, as you might receive a minor discount for this practice, according to Beverly Friedmann, who works as a content manager for ReviewingThis. She mentions some smaller vendors apply charges when customers pay with credit cards. “Additionally, tipping after paying in cash is customary for all services provided, and it’s considerate to do so even at eateries rather than selecting the tip option on your receipt,” states Friedmann. Consider exploring these options.
practices of individuals exceptionally skilled at conserving funds
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Avoiding fees
Cash transactions involve a single payment without any additional fees or concerns about accruing debt. However, using credit cards can lead to various financial pitfalls such as late fees, difficulty keeping track of payments, accumulating debts, and potentially damaging your credit score, according to Friedmann. Additionally, he notes that you cannot overdraw your account with traditional banking methods.
Utilizing cash rather than a debit card
,” she states. Here are a couple of examples.
moments where using your credit card for payments should always be avoided
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Psychological factors
When using cash, you tend to spend less money. According to Friedmann, this happens because you can actually see the amount you’re spending decreasing, making it one of the most effective methods.
innovative methods for saving cash.
Credit cards can enable you to sidestep the actuality of your expenditure. Consequently, you might be inclined to make unplanned buys that exceed your financial plan and credit cap, as observed. On the contrary, seeing money accumulate physically could encourage you to become more strategic in plotting for tomorrow.

Budgeting
Friedmann states that using cash makes budgeting and planning simpler. He explains, “With cash, your budget turns out to be more precise since you can clearly track how much money is available for spending and better distribute resources day-to-day and month-by-month.”
It’s widely recognized that individuals using credit cards often end up spending more than those paying with actual cash,” explains Chantay Bridges, a real estate agent. “If you’re genuinely committed to achieving your savings objectives, sticking to cash is invariably the better choice as it curbs impulsive purchases and ensures you remain focused on your financial targets, making it beneficial across the board.
7 additional reasons why using cash makes sense
will make you eager to find the closest cash machine.

Store discounts
Certain retailers, particularly smaller enterprises and local shops, face charges when they use credit card processing equipment. As a result, some provide a modest reduction for cash payments instead of credit or debit transactions, according to Friedmann. Additionally, carrying substantial amounts of cash might sometimes exert pressure on salespeople during negotiations. “I have a buddy who wanted to buy a TV priced at $1,000. I advised her to enter the shop with $700 in cash and observe how things unfold,” recounts Kofke. Following some bargaining, she managed to purchase the TV for exactly the amount she initially carried in.

Convenience
Friedmann points out that hardly any stores or enterprises refuse cash payments. It’s safe to rely on cash as an dependable means of transaction or keep some readily available as a fallback option if your credit card doesn’t go through, she adds. This becomes particularly crucial during international travel since carrying cash simplifies the process of converting money into local currency.

Good credit
When you opt for using cash, according to Bridges, you start off knowing that your credit score remains stable and unaffected. “By choosing cash transactions, you eliminate concerns related to delayed payments, settlements, or asset seizures,” he explains. “There’s no risk of your credit taking a hit. With cash, creditors won’t be contacting you asking about missing payments.” Additionally, consider these points:
moments when using your credit card for transactions is absolutely inappropriate
.

Limits companies’ tracking
If you’ve observed that after making a purchase, you start receiving more unsolicited offers and advertisements, this happens because stores can monitor their buyers’ expenditures, exchange data with another company, and then aim targeted ads at these individuals, according to Bridges. Additionally, utilizing cash might lessen the volume of unwanted mail you get, as per Bridges. “It’s quite likely that they won’t realize it was you making the payment, which decreases the number of promotions and such arriving via snail mail,” she explains. Using cash aids in minimizing this effect. Below are further details:
methods to reduce receiving excessive junk mail
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And a card?
Now that we understand when to use cash, let’s talk about when to reach for your card. Larger expenditures such as trips, lodging costs, and recurring payments are often better suited for credit cards. This approach allows you to earn reward points for complimentary flights and hotels along with various cash-back benefits,” explains Friedmann. However, is it worthwhile to opt for cashback credit cards? According to Friedmann, definitely yes: “These accumulated cashback rewards and bonuses can significantly accumulate over time.” While cash has its advantages in numerous situations, certain scenarios might call for an alternative method.
moments when using cash is not advisable
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Sources
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Saranya Ramanathan
, One Fine Wallet
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Beverly Friedmann
, ReviewingThis -
Chantay Bridges
Los Angeles Property Listings